September 19, 2012

Japan Softens Stance On 2040 Nuclear Power Phase Out Policy

In a reversal of a policy announced just last week, the Japanese government has stopped short of declaring 2040 the deadline for ending all nuclear power production in the country.

It is widely believed that pressure from business groups, who opposed the original plan based on the potential economic damage it might cause, led to the change.

Instead of a hard deadline, the government said it would “take into consideration” the original goal and promised to “engage in debate with local governments and international society and to gain public understanding” of Japan´s nuclear energy goals, according to a resolution from cabinet of Prime Minister Yoshihiko Noda.

The original plan passed last week envisioned the phasing out of Japan´s nuclear reactors that currently generate about 30% of the country´s total electricity. To make up the difference, the Japanese had planned on the tripling of energy generated from renewable sources. Meanwhile, the country said it would continue to be a top importer of fossil fuels like coal, oil and natural gas. The country will also take steps to conserve energy and reduce its waste, according to the plan.

"This is a strategy to create a new future," a policy statement released on Friday said. "It is not pie in the sky. It is a practical strategy."

The announcement, which had its roots in an announcement made by Naoto Kan during the Fukushima disaster, generated mounting opposition from within Japan´s economic sectors. On Tuesday, the chairmen of prominent Japanese business associations called a rare press conference to voice their resistance to the plan. On Wednesday, that same group praised the shift in policy.

The policy change accompanied the opening of a new nuclear power regulatory agency after the old agency had to be scrapped amid criticisms of corruption and cronyism. The new agency has already come under criticism because Shunichi Tanaka, the head of a five-person committee that would set nuclear policy, had a heavy hand in building a strong nuclear industry, leading many to believe the new agency will be as dysfunctional as the last.

Currently, many of the country´s nuclear reactors sit idle after they were shut down during the Fukushima disaster. As pro-business parties call for a restart of the reactors, public opposition over safety concerns has kept them off-line. Many communities surrounding these reactors have also been advocating their return to use as they benefit from government subsidies and incentives.

Several economic factors could prevent the more permanent shuttering of idled reactors. Doing so would set back power companies $56 billion in losses and make at least four of the utilities insolvent, according to the government´s Agency for Natural Resources and Energy. The tightly regulated and competition-free nature of the Japanese power industry means if power companies go bankrupt, there will not be any existing entities to fill the void.

Despite economic and safety concerns, the removal of reactors from the Japanese landscape remains popular with the public. Most polls show that the Japanese people would like to completely eliminate the use of nuclear power in the future.

"A total exit from nuclear is positive for the economy, on balance," Andrew Dewit, a professor at Rikkyo University told Reuters.